Development of Islamic financing in Central Asia gaining momentum
Islamic banking is increasingly impacting the economic development of Central Asian countries - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. This point of view was voiced by Muhammad Zubair Mughal, CEO of the AlHuda Islamic Center for Islamic Banking and Economics during the recent week of Islamic finance in Astana. The specifics of Islamic banking or the way of conducting financial and banking affairs is that this economic system is based on the principles of Islamic law or Sharia. On the other hand, the Islamic financial economy is not a religious sphere of activity, but only represents a different economic structure with a pronounced social orientation. In short, the Islamic lending concept consists in the absence of an interest rate on loans issued and denial of any transactions of an uncertain nature. In the context of microfinance, Islamic banking adheres to such principles as a pre-agreed share in the project profit, distribution of losses in proportion to the capital invested, interest-free loan based only on repayment of the loan at the agreed time, direct investment. In the modern world, these Islamic financing mechanisms are widely added to arsenal of banking sector in non-Muslim states - in Australia, Great Britain, India, the USA, European countries. The major banking corporations create Islamic divisions and departments in their structure. According to experts, the cooperation of the Central Asian region with Islamic banking and financial institutions will serve as a kind of link with the economic space of Muslim countries and provide additional advantages in a competitive global economy. Today about US $ 2 trillion of funds have been accumulated and being circulating in the Islamic finance sector. The Islamic Development Bank (IsDB) is one of the largest Islamic financial and credit institutions. Turkmenistan became its member in 1994. As of 1 January 2017, the IsDB group has financed in Turkmenistan the implementation of 17 projects, having allocated credit lines for a total cost of US$ 1.164 billion. Last year, the IsDB signed an agreement with the State Bank for Foreign Economic Affairs on the allocation of a loan of US $ 700 million for the construction of the Turkmen segment of the Turkmenistan-Afghanistan-Pakistan-India gas trunkline.
